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All sourcesNASA NTRSDOE OSTI
DOE OSTI2025

What Rocks and What's Not So Hot: U.S. Industry Perception of Geothermal Tax Credits

Nationwide, four U.S. federal tax credits promote the adoption of geothermal heat pumps (GHPs) and geothermal power plants and were recently updated with enactment of the Inflation Reduction Act (IRA).1 However, uptake of these geothermal tax credits has lagged behind other eligible technologies.2 With the support of the U.S. Department of Energy (DOE)'s Geother- mal Technologies Office, researchers at the National Renewable Energy Laboratory (NREL) engaged with the geothermal industry to determine: 1) how the industry will use the tax credits, 2) remaining challenges to utilizing tax credits, and 3) suggestions on solutions that could help accelerate tax credit uptake. Insights were obtained through two industry question- naires (59 responses)3 and 21 interviews with representatives from geothermal industry groups, project developers, com- ponent manufacturers, and financiers, as shown in Figures 1 and 2. This article synthesizes the industry's perception of these tax credits, i.e., Section 25D (residential GHP), Section 48 (commer- cial GHP), Section 48E (investment tax credit [ITC] for electricity), and Section 45Y (production tax credit [PTC] for electricity).

15 GEOTHERMAL ENERGY↗
DOE OSTI2024

Tax Credits for Clean Electricity: The Distributional Impacts of Supply-Push Policies in the Power Sector

We evaluate distributional and efficiency consequences of the bulk power clean electricity tax credits authorized by the 2022 Inflation Reduction Act. To do so, we link detailed electricity capacity expansion, computable general equilibrium, microsimulation, and air pollution models to estimate economic welfare and health incidence across demographic groups. We evaluate trade-offs between policy efficiency and income progressivity by comparing the tax credits to cap-and-trade policies. The tax credits encourage increased clean electricity investment, resulting in a reallocation of capital from elsewhere in the economy, higher prices for capital and other goods, lower power prices, and lower emissions. The tax credits yield progressive outcomes for economic welfare at the expense of efficiency while all modeled policies demonstrate progressivity in health impacts. The health benefits, absent climate benefits, exceed total policy costs and provide greater benefits for low-income and historically marginalized households given coincidence of household locations and emissions exposure intensity.

distributional impacts↗
DOE OSTI2023

Tax Credits for Clean Electricity: The Distributional Impacts of Supply-Push Policies in the Power Sector

We evaluate distributional and efficiency consequences of the bulk power clean electricity tax credits authorized by the 2022 Inflation Reduction Act. To do so, we link detailed electricity capacity expansion, computable general equilibrium, data-rich microsimulation, and air pollution models to estimate the policy incidence in terms of economic welfare and health impacts across a wide range of demographic groups. We evaluate the tradeoff between policy efficiency and income progressivity by comparing the tax credits to cap-and-trade policies that vary revenue recycling approaches. Under the scenarios analyzed the bulk power tax credits lead to increased clean electricity technology deployment resulting in a reallocation of capital from elsewhere in the economy, higher prices for capital and other goods, lower power prices, and lower emissions. The tax credits yield progressive outcomes for both economic welfare and health impacts. The health benefits exceed total policy costs and provide greater benefits for low-income and historically-marginalized households given the coincidence of household and emission source locations.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2024

A Clean Energy Deployment Baseline for the Energy Community and Low-Income Tax Credit Bonuses [Slides]

The Inflation Reduction Act of 2022 introduced, for the first time, place-based federal tax incentives for projects sited in “Energy Communities,” potentially changing the economic calculus of where projects are best sited. Storage projects can qualify for a 10-percentage-point bonus to the Investment Tax Credit (e.g., from 30% to 40%), while wind and solar projects may qualify for either the ITC bonus or a 10% bonus to the Production Tax Credit (e.g., from $\$27.5$ to $\$30.25$/MWh). Energy Communities are areas with historical ties to fossil fuel industries and above average unemployment levels (FFEU), with closed coal mines or power plants, or contaminated properties. They seek to identify locations across the US that could especially benefit from economic revitalization. This report explores how the new federal tax credit incentives are impacting clean energy deployment patterns and establishes historical baselines against which future changes can be compared. We include a few case studies of clean energy projects going specifically to areas that were recently impacted by coal power plant closures to provide concrete examples of investments in Energy Communities. However, this publication does not assess how much of the incentive benefits pass from clean energy developers to hosting communities, nor does it offer a comprehensive view of the economic effects of clean energy deployment on Energy Communities. Key highlights include: - As clean energy projects take multiple years to conceptualize and develop, it is likely too early to see shifts towards Energy Community locations either among newly built projects or those that entered interconnection queues in 2023. - Approximately 35% of onshore wind, 50% of solar, and 60% of storage capacity built in 2023 and the first half of 2024 are located in Energy Communities, making them likely eligible for bonus incentives. While these bonus incentives were not available to projects coming online before 2023, we used 2023 Energy Community definitions to classify whether past projects were built in what is now considered an Energy Community. The deployment levels for 2023-2024 are similar to recent years (2020-2022) for solar and storage but slightly lower for wind. - Clean energy capacity has surged in the interconnection queues over the last few years, with about 45-50% of both recently proposed and total queued capacity being located in Energy Communities. While the amount of capacity in Energy Communities has also grown, its relative share is either stable (solar and storage) or slightly lower (wind) among projects that entered the queue in 2023. - Clean energy projects can be built at lower costs in Energy Communities. The levelized cost of energy after incentives was on average $\$9$/MWh (24%) lower for solar projects and $\$2$/MWh (6%) lower for wind projects built in 2023, relative to projects not located in Energy Communities. Wholesale electricity values at Energy Community locations relative to the rest of the market vary by region. The average value was often higher for wind projects (-$\$3$ to $\$11$/MWh) but lower for solar projects (-$\$6$ to 0/MWh). - Distributed solar that is owned by commercial entities is eligible for the Energy Community bonus and also, potentially, a Low-Income Community bonus. Residential solar installations in qualifying Energy Communities that are third-party owned represent about 10% of the total residential market. Larger commercial and industrial solar installations in Energy Communities make up 17% of the total market in 2023. Nearly 2 GW of distributed solar was built in areas qualifying as Low-Income Communities in 2023, exceeding the available annual program cap of 700 MW. Continued tracking of these trends will be important for system planners, investors, and local communities.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2024

Can section 45Q tax credit foster decarbonization? A case study of geologic carbon storage at Acid Gas Injection wells in the Permian Basin

Carbon capture, utilization, and storage (CCUS) is an important pathway for meeting climate mitigation goals. While the economic viability of CCUS is well understood, previous studies do not evaluate the economic feasibility of carbon capture and storage (CCS) in the Permian Basin specifically regarding the new Section 45Q tax credits. We developed a technoeconomic analysis method, evaluated the economic feasibility of CCS at the acid gas injection (AGI) wells, and assessed the implication of Section 45Q tax credits for CCS at the AGIs. We find that the compressors, well depth, and the permit and monitoring costs drive the facility costs. Compressors are the predominant contributors to capital and operating expenditure driving the levelized cost of CO 2 storage. Strategic cost reduction measures identified include 1) sourcing of low-cost electricity and 2) optimizing operational efficiency in well operations. In evaluating the impact of the tax credits on CCS projects, facility scale proved decisive. We found that facilities with an annual injection rate exceeding 10,000 MT storage capacity demonstrate economic viability contingent upon the procurement of inputs at the least cost. The new construction of AGI wells were found to be economically viable at a storage capacity of 100,000 MT. The basin is heavily focused on CCUS (tax credit – $\$$65/MT CO 2 ), which overshadows CCS ($\$$85/MT CO 2 ) opportunities. Balancing the dual objectives of CCS and CCUS requires planning and coordination for optimal resource and pore space utilization to attain the basin's decarbonization potential. We also found that CCS on AGI is a lower cost CCS option as compared to CCS on other industries.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2023

Section 48C Tax Credits - designated energy communities

Collection of data and an interactive mapping tool that designates census tracts that are considered energy communities for the purposes of the 48C tax credit. While any location in the U.S. is eligible for 48C, to be considered for the portion of credits dedicated to energy communities, a project must be located in a census tract that satisfies the relevant requirements of an energy community as noted in 48C and has not received funding in a prior round of 48C. Additional information on the 48C tax credit can be accessed on the Interagency Working Group on Coal & Power Plant Communities & Economic Revitalization Energy Communities website (https://energycommunities.gov/).

48C↗
NASA NTRS1984

Effects of expiration of the Federal energy tax credit on the National Photovoltaics Program

Projected 1986 sales are significantly reduced as a direct result of system price increases following from expiration of the Federal energy tax credits. There would be greatly reduced emphasis on domestic electric utility applications. Indirect effects arising from unrealized economies of scale and reduced private investment in PV research and development (R&D) and in production facilities could have a very large cumulative adverse impact on the U.S. PV industry. The industry forecasts as much as fourfold reduction in 1990 sales if tax credits expire, compared with what sales would be with the credits. Because the National Photovoltaics Program is explicitly structured as a government partnership, large changes in the motivation or funding of either partner can affect Program success profoundly. Reduced industry participation implies that such industry tasks as industrialization and new product development would slow or halt. Those research areas receiving heavy R&D support from private PV manufacturers would be adversely affected.

Smith, J. L.↗
DOE OSTI2022

Evaluating the Impacts of the Bipartisan Budget Act of 2018 45Q Tax Credit on CCS Network Costs

This study evaluates the impact of the Bipartisan Budget Act of 2018 (BBA)-amended 45Q tax credit on integrated carbon capture and storage (CCS) networks for source types and geologic storage reservoirs common to the north-central U.S. The integrated CCS networks evaluated were chosen to closely replicate those in the forthcoming National Energy Technology Laboratory (NETL) central U.S. CCS cost options study’s Northwest CCS Network Regional Impact Area (Northwest Impact Area).

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2024

Driving Investment in Wind Energy: An Introduction to Incentives and the Inflation Reduction Act [Slides]

In a webinar hosted by the U.S. Department of Energy's WINDExchange initiative, experts from the North Carolina Clean Energy Technology Center and the National Renewable Energy Laboratory introduce attendees to the key incentives supporting investment in wind energy deployment and manufacturing in the United States, as well as the role that the Inflation Reduction Act (IRA) plays in shaping those investments. Over the past few decades, incentives like the production tax credit and investment tax credit have supported the growth of wind energy deployment, while manufacturing-related incentives have helped scale up domestic manufacturing of wind energy components. With its passage in 2022, the IRA ushered in a new wave of investment in wind energy and other renewable technologies, as well as introducing new workforce requirements and equity provisions. This presentation explores the history and impact of major incentives, unpacks some of the complex provisions of the IRA, and highlights the ways federal incentives and policies will continue to shape the wind energy industry.

17 WIND ENERGY↗
DOE OSTI2025

Potential Cost Reduction in New Nuclear Deployments Based on Recent AP1000 Experience

The completion of Vogtle Units 3 and 4, despite significant cost and schedule overruns, a major bankruptcy, and a pandemic, demonstrates that the U.S. nuclear industry can still develop new supply chains, train a highly skilled workforce, and build large nuclear power plants. Vogtle, being a first-of-a-kind (FOAK) plant, faced overruns, but FOAK overruns can decrease with more deployments through a combination of design standardization and modularization, transferring and implementing lessons learned between consecutive projects, and innovation. This report quantifies the potential cost and schedule reductions in future AP1000 plants in the US and identifies the barriers in achieving those reductions. It starts with a summary and analysis of the cost and construction timeline data for AP1000 plants that started construction in the United States (Vogtle) and China. Motivated by the steep schedule reductions from the first to second series of AP1000 plants in China, a cost reduction model was developed to quantify potential reductions for future AP1000 builds in the US. Results show that within about 3 more builds, AP1000s can become economically attractive in large markets in the U.S., without leveraging the Investment Tax Credit (ITC) or Production Tax Credit (PTC), and much sooner if these tax credits are available. Importantly the financial risks for future AP1000 builds in the US might be much smaller than observed in the FOAK plants. The study also identifies various barriers for future builds including the availability of a supply chain and a skilled workforce, and emphasizes the importance of making investments to gather and implement lessons learned between consecutive projects.

22 GENERAL STUDIES OF NUCLEAR REACTORS↗
DOE OSTI2023

Economic Evaluation of a Coupled Nuclear Power Plant and Hydrogen Production Facility: A Case Study

This study optimized the design sizes and operation of a power-to-hydrogen-to-power integrated energy system to allow a baseload power plant to operate flexibly in the energy market. In collaboration with a utility industry partner, the system, consisting of an electrolyzer, compressors, storage tank, and fuel cell, was optimized under conditions specific to the proposed project at the site of a nuclear power plant. The Design Integration and Synthesis Platform to Advance Tightly Coupled Hybrid Energy Systems (DISPATCHES) maximized net present value by optimizing sizing of components and dispatch decisions. Revenues included sale of electricity, capacity payments typical of the New York Independent System Operator, and the section 45V hydrogen production tax credit of the Inflation Reduction Act of 2022 (the tax credit was assumed to be available to legacy plants in the absence of clear guidance at present). Under default assumptions which excluded many capital expenditures, the base case optimized solution had a net present value of $\$$1.4 million over a 30 year lifetime, with a 0.365 MW fuel cell operating nearly continuously and 85% of revenues supplied by the hydrogen production tax credit (which was counted as a revenue regardless of profit, thus assuming credit monetization or offset of taxes within the larger firm was possible in all years). Beyond the base case, a sensitivity study elucidated drivers of the economics as capacity payment rate and hydrogen production tax credit rate vary. Additional sensitivity studies also extended results to variation of other, previously fixed parameters, including the fuel cell capital cost, and to imposition of further constraints. Optimization was also repeated for the default assumptions but recognizing tax credits upon use of hydrogen rather than upon its production, producing no change in the optimal solution. Most notably, capacity payments above $\$$15/kW-month drove optimal fuel cells multiple times larger than those with the default estimated capacity payment of $\$$2.5/kW-month (approaching 11 vs. 0.365 MW), and these larger fuel cells operated rarely (capacity factors of ~0.03). Furthermore, when the hydrogen production tax credit was provided for only 10 years, under the specific assumptions of this study (e.g., neither site preparation costs nor electrolyzer capital cost counted), the optimal solution avoided economic loss by ceasing system operation after the 10th year. Viewed broadly, this study demonstrated the capabilities of DISPATCHES, which can be user-adapted to serve other industrial case studies.

08 HYDROGEN↗
DOE OSTI2024

Effects of the U.S. inflation reduction act on SMR economics

The U.S. Inflation Reduction Act (IRA) of 2022 provides a wide array of tax credits and other incentives for low-carbon energy. The technology-neutral clean generation production tax credit (PTC) (Section 45Y of the U.S. Internal Revenue Code) and the technology-neutral investment tax credit (ITC) (Section 48E) lower the net cost of new electricity generation projects with zero or negative greenhouse gas emission rates. We evaluate the impact of the IRA legislation—specifically the PTC and ITC—on the cost-competitiveness of small modular reactors (SMRs). We use the Argonne Low-carbon Energy Analysis Framework (A-LEAF) model to calculate the capacity factor of an SMR with a range of hypothetical variable operating and maintenance (O&M) costs in the Electric Reliability Council of Texas (ERCOT) electricity market. We selected ERCOT for market modeling because of its competitive structure, available data, and extensive use in prior literature. We use a discounted cash flow model to calculate the SMR’s net present value based on the market prices and capacity factors from A-LEAF, hypothetical ranges of capital and variable O&M costs, and other input parameters, with or without the IRA tax credits. We determine the SMR owner’s optimal choice of PTC or ITC for the hypothetical ranges of capital and variable O&M costs. We also evaluate potential shifts in the SMR owner’s optimal choice of PTC or ITC based on historical patterns of nuclear capital cost overruns in the United States. We also assess the sensitivity of our results to longer PTC period and electricity prices from the New England market, which tend to be higher than electricity prices in ERCOT. We find that even with the IRA tax credits, only SMRs with low capital and variable O&M costs would be economically feasible in the low-price ERCOT market scenario modeled. A longer PTC period and higher-price market such as New England, however, would significantly expand the economic feasibility of SMRs in the United States.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2023

Evaluating Impacts of the Inflation Reduction Act and Bipartisan Infrastructure Law on the U.S. Power System

The Inflation Reduction Act of 2022 (IRA) and the Infrastructure Investment and Jobs Act of 2021, commonly referred to as the 'Bipartisan Infrastructure Law (BIL),' collectively represent the largest commitment of the U.S. Federal Government to invest in the modernization and decarbonization of the U.S. energy system. The Congressional Budget Office (CBO) estimates that total support for the broad range of climate and clean energy programs, tax credits, and other incentives authorized through the two laws will exceed $430 billion from 2022 through 2031 (CRS 2022; CBO 2021, 2022). While the climate and clean energy provisions are numerous and have the potential to impact all aspects of the U.S. energy system from fuel and electricity production to final consumption in industry, transportation, and buildings, the provisions relevant to the electricity sector - in particular the suite of tax credits for clean generation, storage, and carbon dioxide ( CO 2 ) capture and storage - are expected to be some of the most consequential in terms of emissions reduction and clean energy deployment (Larsen et al. 2022; Jenkins, Mayfield, et al. 2022; Mahajan et al. 2022; Zhao et al. 2022). In this report, we detail the methods and results of a study estimating the potential impacts of key provisions of IRA and BIL on the contiguous U.S. power sector from present day through 2030. The analysis employs an advanced power system planning model, the Regional Energy Deployment System (ReEDS), to evaluate how major provisions from both laws impact investment in and operation of utility-scale generation, storage, and transmission, and, in turn, how those changes impact power system costs, emissions, and climate and health damages. While not exhaustive in capturing every provision, the analysis estimates the possible scale of power-sector impacts that could result from the modeled provisions in IRA and BIL. The study is structured around two scenarios to evaluate the potential impacts of both laws on the power sector: 1) No New Policy: A counter-factual scenario that reflects all Federal and state policies enacted as of September 2022, with exception to IRA and BIL, and assumes load growth consistent with the Energy Information Administration's Annual Energy Outlook 2022 (AEO22) Reference case (EIA 2022a); 2) IRA-BIL: A scenario reflecting all Federal and state policies enacted as of September 2022, including key IRA and BIL provisions, most notably the investment and production tax credits for zero-carbon emitting electricity generation and storage (ITC and PTC), the tax credit for CO 2 capture and storage (45Q), and the tax credit for existing nuclear plants (described further in Section 2.3). To account for the impacts of IRA and BIL on electrification, assumes increased load growth consistent with a scaled version of the Medium Electrification scenario from the Electrification Futures Study (Mai et al. 2018). These scenarios are simulated across seven sets of assumptions with varying projected future electricity market conditions, including technology costs and performance, natural gas prices, and the degree of availability, feasibility, and cost of development of renewable resources, electricity transmission, and CO 2 pipeline, injection, and storage infrastructure. In addition, we simulate two sensitivities on the 'policy' treatment in which we vary key assumptions pertaining to the realized value of the clean electricity ITC and PTC: 1) the cost of monetization of tax credits, and 2) the level of bonus crediting realized by project developers. We demonstrate that IRA and BIL have the collective potential to drive substantial growth in clean electricity by 2030, while reducing costs for consumers, mitigating climate change, and decreasing the human health impacts of power sector emissions. However, we also demonstrate that if expected cost improvements of clean technologies are not realized and/or constraints on deployment driven by factors such as supply-chain challenges, regulatory hurdles, and the social acceptability of energy infrastructure development limit the rate of clean energy and associated infrastructure deployment (such as transmission), then the share of clean generation achieved and the associated emissions benefits realized may be substantively reduced.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2023

Assessing the Impact of the Inflation Reduction Act on Nuclear Plant Power Uprate and Hydrogen Cogeneration

On August 16, 2022, Congress passed the Inflation Reduction Act (IRA) to promote investment in new, carbon-free power generation and sustainable operation of existing carbon-free assets. Specifically, the IRA includes both a production tax credit (PTC – Section 45Y of the IRA) and an investment tax credit (ITC – Section 48E) which utilities may leverage to offset the costs of power uprate. Further, the IRA includes a provision (Section 45V) for a PTC associated with carbon-free hydrogen cogeneration. These tax credits, along with recent legislation efforts to decarbonize the country, have re-emphasized the importance of maintaining and optimizing the existing nuclear plant operating fleet. As a result, utilities are reexamining the possibility of uprating their existing nuclear assets to further maximize carbon-free electricity generation.

08 HYDROGEN↗
DOE OSTI2024

Techno-economic assessment of electricity market potential for co-located hydro-floating PV systems

Abstract—Harnessing renewable energy from diverse sources is paramount for sustainable power systems. Recently, co-located floating PV (FPV) systems present an intriguing prospect in this context. These hybrid systems, blending hydro and solar power, may offer a more consistent electricity output and potential economic advantages. Yet, assessing their actual potential requires a comprehensive techno-economic assessment. In addition, probabilistic price forecasting has recently gained attention in electricity market because decisions based on such predictions can yield significantly higher profits than those made with point forecasts alone. To this end, this paper embarks on a journey to elucidate the electricity market potential of co-located hydro-FPV systems in a probabilistic fashion to investigate the technological merits and economic viability of co-located hydro-FPV under different market structures. Our preliminary findings suggest that LCOE and payback metrics are sensitive not only to different markets but also to different solar incentives. Concurrently, we also observe that the payback period is generally faster with a production tax credit (PTC) than an investment tax credit (ITC). This assessment serves as a cornerstone for understanding the future prospects of co-located hydro-FPV systems in modern electricity markets.

13 HYDRO ENERGY↗
DOE OSTI2026

Data for Greenhouse Gas Accounting Procedures in Low Carbon Fuel Policies Overlook the Spatial Variability of Miscanthus-Derived Sustainable Aviation Fuel

Low carbon fuel policies such as the U.S. Renewable Fuel Standard (RFS), Canada Clean Fuel Regulations (CFR), and California Low Carbon Fuel Standard (LCFS) as well as the 45Z tax credit are intended to reduce greenhouse gas (GHG) emissions from transportation. Cellulosic feedstocks, optimized biorefineries, and favorable farming locations can significantly reduce biofuel carbon intensity (CI). Despite advances in field-to-fuel GHG monitoring and flexibility in resource allocation within biorefineries (e.g., governing net electricity production), rigid CI accounting procedures in current policies may limit CI responsiveness across candidate sites and processing facilities. This work examines a hypothetical biomass-to-sustainable aviation fuel (SAF) pathway using miscanthus and alcohol-to-jet (i) to demonstrate how GHG accounting requirements drive estimates of biofuel CIs and (ii) to explore potential CI and financial implications of scenario-specific life cycle assessment (LCA). Results demonstrate that GHG accounting using the CFR/LCFS can reasonably account for distinct levels of net electricity production by a biorefinery, but only the CFR yields similar CI sensitivity to spatially explicit factors (feedstock CI, grid electricity CI) as scenario-specific LCA: most GHG accounting frameworks do not capture CI variation across candidate sites in the United States. Ultimately, this work demonstrates the importance of LCA methodological specifications in low carbon fuel policies and tax credits.

Miscanthus↗
DOE OSTI2026

Foreign Entity of Concern Requirements in the One Big Beautiful Bill Act

The One Big Beautiful Bill Act (OBBB), enacted July 4, 2025, makes billions of dollars in federal energy tax credits conditional on supply chain independence from China and other foreign entities of concern. The OBBB simultaneously creates powerful economic incentives to reshore energy supply chains to the United States and allied nations. Through such incentives, the OBBB elevates digital assurance and supply chain verification from voluntary best practices into critical capabilities for demonstrating tax credit eligibility. The OBBB uses tax credit eligibility requirements to simultaneously address national security concerns regarding foreign supply chain dependencies and incentivize domestic energy manufacturing. This brief details how organizations should operationalize these requirements through baseline compliance audits, interim documentation systems, supply chain diversification strategies, and long-term institutional integration of digital assurance capabilities that turn compliance burdens into competitive advantages

29 - ENERGY PLANNING, POLICY AND ECONOMY↗
DOE OSTI2024

Technological evolution of large-scale blue hydrogen production toward the U.S. Hydrogen Energy Earthshot

Hydrogen potentially has a crucial role in the U.S. transition to a net-zero emissions economy. Learning from large-scale hydrogen projects will boost technological evolution and innovation toward the U.S. Hydrogen Energy Earthshot. We apply experience curves to estimate the evolving costs of blue hydrogen production and to further examine the economic effect on technological evolution of the Inflation Reduction Act’s tax credits for carbon sequestration and clean hydrogen. Learning-by-doing alone can decrease the production cost of blue hydrogen. Without tax incentives, however, it is hard for blue hydrogen production to reach the cost target of $\$1$/kg H 2 . Here we show that the breakeven cumulative production capacity required for gas-based blue hydrogen to reach the $\$1$/kg H 2 target highly depends on tax credit, natural gas price, inflation rate, and learning rates. We make recommendations for hydrogen hub development and for accelerating technological progress toward the Hydrogen Energy Earthshot.

08 HYDROGEN↗